Another Information Security Breach

This time on a government database. See the CNN Article:

Personal Information Stolen From 146,000 People - CNN
Anyone holding such information on the internet should be required to have their systems independently tested on an annual basis. Many company's have audits of their financial records and internal controls. Why not audit the security controls of their network?

Accounting Basics: Management Accounting vs. Financial Accounting

This 3rd installment in my "Accounting Basics" series will discuss the differences between Management Accounting and Financial Accounting.

The private accounting field can be further divided into two sub-categories depending on how the information generated by the accountant is used.

As its name implies, Management (or Managerial) Accounting provides that information which is used by managers within the company. The information provided can be as broad as long range financial projections or as detailed as analyzing cost variances (ie budget overages). Wikipedia defines management accounting as being " concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis in making informed business decisions that would allow them to be better equipped in their management and control functions."

While management accounting concerns the internal use of information, Financial Accounting concerns the external use of accounting information. Of course financial accounting concepts are used in management accounting. Financial accounting involves providing information which is useful to external users such as prospective buyers and investors, creditors, government agencies, etc. Financial Statements are the most provided piece of information. These include the Balance Sheet and Income Statement (to be explained in a future post). Wikipedia defines financial accounting as "the field of accountancy concerned with the preparation of financial statements for decision makers, such as stockholders, suppliers, banks, government agencies, owners, and other stakeholders. Financial accountancy is used to prepare accounting information for people outside the organization or not involved in the day to day running of the company."

HIPAA: just something to read more about

Haven't really delved into this at all. Came across this article at the link below. Other than the form which I kind of gloss over at any new doctors office. I really don't know much about HIPAA. The author at the link below has a link to some more documentation on HIPAA. Just posting this as one of those things I'd like to read more on when I get a chance (Sarbanes-Oxley is another one).

Today's Debate: HIPAA, end it or mend it? on ZDNet

Save Money: Buy Refurbished PC's

BNet had a good article (which you can read my comments on) regarding purchasing refurbished PC's...something I have no problem with. Read the article at the link below and read my comment at their site also:


Should You Buy a Refurbished PC? on BNet

Operating Lease vs. Capital Lease

Good article on Bnet identifying the differences between an operating lease and a capital lease. Includes accounting for each type of lease.

This link should get you to their article:

BNET Identifying Capital and Operating Leases

Accounting Basics: Public Accounting vs. Private Accounting

Next in my Accounting Basics Series: Public Accounting vs Private (Industrial) Accounting.

The old accounting text book defines public accounting as: offering accounting and related services for a fee to companies, other organizations and the general public. The other services can include auditing, tax services and consulting. The certification offered for this type of accountancy is a Certified Public Accountant. The exam is prepared and administered by the American Institute of Certified Public Accountants (AICPA).
Private (or industrial accounting) is the opposite. Instead of providing services to many clients, a private accountant provides services to a single business. In a business consisting of many accountants, the 'head accountant is typically called the controller. Private accountants may or may not be CPA's. The National Association of Accountants does offer a certificate for private accountants called a Certificate in Management Accounting (CMA). Private accountants are often much more specialized and have to adapt to the needs of their company (controlling costs, budgeting, accounting systems, etc.)